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Wednesday, August 15, 2012

What is the Tragedy of the Commons?

A couple of weeks ago, I posted on how "The Economics of Antibiotics Resistance" could be viewed as an example of the "tragedy of the commons." I got a few notes suggesting that I explain the term more fully. Here's the explanation from my own Principles of Economics textbook. (Of course, if you are teaching a college-level intro economics class, I would encourage you to take a look at it at the website of the publisher, Textbook Media. Along with many expository virtues, my book is priced far below the $200 price of many leading textbooks, at at $40 for a combination of a soft-cover paper copy and on-line access. On-line access alone, or micro and macro splits, are priced even lower.) From Chapter 15:

"The historical meaning of a commons is a piece of pasture land that is open to anyone who wishes to graze their cattle upon it. More recently, the term has come to apply to any area that is open to all, like a city park. In a famous 1968 article, a professor of ecology named Garrett Hardin (1915-2003) described a scenario called the tragedy of the commons, in which the utility-maximizing behavior of individuals ruins the commons for all."

"Hardin imagined a pasture that is open to many herdsmen, each with their own herd of cattle. A herdsman benefits from adding cows, but too many cows will lead to overgrazing and even to ruining the commons. The problem that when a herdsman adds a cow, the herdsman personally receives all of the gain, but when that cow contributes to overgrazing and injures the commons, the loss is suffered by all of the herdsmen as a group—so any individual herdsman suffers only a small fraction of the loss. Hardin wrote: `Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit—in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons. Freedom in a commons brings ruin to all.'"

"This tragedy of the commons can arise in any situations where benefits are primarily received by one party, while the costs are spread out over many parties. For example, clean air can be regarded as a commons, where firms that pollute air can gain higher profits, but firms that pay for anti-pollution equipment provide a benefit to others. A commons can be regarded as a public good, where it is difficult to exclude anyone from use (nonexcludability) and where many parties can use the resource simultaneously (nonrivalrous)."

"The historical commons was often protected, at least for a time, by social rules that limited how many cattle a herdsman could graze. Avoiding a tragedy of the commons with the environment will require its own set of rules which limit how the common resource can be used."

Hardin's original 1968 article is widely available on the web--for example, here.

A few years ago in 2008, Ian Angus wrote a provocative essay in Monthly Review called “The Myth of the Tragedy of the Commons.” The tragedy of the commons is often considered a politically liberal insight, because it offers a potential justification for government regulation of shared resources. But Angus attacks from the thesis from further to the political left, argues that Hardin's thesis is evidence-free, that it ignores the reality of community self-regulation, and that it amounts to blaming the poor for their poverty. Here are a few words from Angus's trenchant essay:

“Since its publication in Science in December 1968, ‘The Tragedy of the Commons’ [by Garrett Hardin] has been anthologized in at least 111 books, making it one of the most-reprinted articles ever to appear in any scientific journal. . . . For 40 years it has been, in the words of a World Bank Discussion Paper, ‘the dominant paradigm within which social scientists assess natural resource
issues’. . . It’s shocking to realize that he provided no evidence at all to support his sweeping conclusions. He claimed that the ‘tragedy’ was inevitable—but he didn’t show that it had happened even once. Hardin simply ignored what actually happens in a real commons: self-regulation by the communities involved. . . . The success of Hardin’s argument reflects its usefulness as a pseudo-scientific explanation of global poverty and inequality, an explanation that doesn’t question the
dominant social and political order. It confirms the prejudices of those in power: logical and factual errors are nothing compared to the very attractive (to the rich) claim that the poor are responsible for their own poverty. The fact that Hardin’s argument also blames the poor for ecological destruction is a bonus.”

I enjoyed Angus's counterattack, but in the end, it seemed to me overwrought. The logic behind the tragedy of the commons is solid enough that it is often a useful starting point for thinking about shared
resource issues. I'm fairly confident that Hardin didn't see himself as blaming the poor for their own poverty and for ecological destruction! However, it's important to emphasize that because a tragedy of the commons is possible doesn't make it inevitable. And further, as the penultimate sentence
from my short textbook description mentions,social rules and community self-regulation have
often been able to manage the commons for a considerable period of
time.